The Grand Theory of Amazon 📦


#1

Continuing the discussion from Who is likeliest to reach $1trillion market cap 1st? :money_with_wings:: where Amazon is leading the charge, here is the best curated video I’ve come across that explains Amazon 101:


Tech bubble
#2

Will Amazon continue to rise?

I’m a complete n00b when it comes to stocks and shares but I’ve been waiting for Freetrade to launch to buy Amazon shares

It continues to rise and rise!


(Vladislav Kozub) #3

AMZN has a huge potential long-term. Their eCommerce is rising across the globe, their pharmacy venture is already dipping healthcare companies, they dipped UPS and FedEx by 25% when announced their own delivery service, they have just dipped Cisco by 5% on speculation to enter Networking.

And the juiciest part here is AWS. It is one of the most scalable services created by humans (also one would argue if Bezos is one), it is a huge fixed cost machine that benefits a lot from growth, which worked perfectly well having Amazon Commerce their core client. Imagine adding all other ventures to it - pure cost savings that will inevitably lead to better margins (for the conglomerate overall).

Although I personally have no doubts it will be on $10,000 (that is hope to an extent) per share by 2030, they still may have issues in the short run (Chinese Trade War, Trump’s tweets [being the minor issue], new ventures going through establishment process which can be painful and not always well thought of).

If you want to buy it, a few months will make no difference in the long run, I would not even think a year or two will. Just make sure you do not impulsively buy it based on some random forum guys’ praises, they are always subjective.


(Tommy Lowe) #4

:joy:


#5

Thanks for the reply :raised_hands:

I’ve just been watching the video in the OP and had no idea the amount of services they offer


(Vladislav Kozub) #6

If we only knew all the services Disney offers… And yet being valued less than Netflix. God bless ESPN and the Disney’s licences that will be revoked from Netflix in 2019 :roll_eyes:

Edit: although Hulu could also be the successor, it is not quite clear yet, but anyway, all of the Disney’s content is coming home


#7

An education! I suppose the difference is what that video was saying around scalability and profit?


(Vladislav Kozub) #8

Profit does not seem to be as important in stocks like Amazon and tech, in comparison to rapid growth and market dominance.

Some people may argue that Tesla is far too overpriced, more expensive than VW, GM and Ford, but their revenues grow 50 to 100 per cent YoY, whereas the others stagnate at 3 to 10.

I guess same applies to Amazon, 10 to 30 per cent when you are already beyond 100bn - that is admirable, and that is what makes people want to be in that boat (well, at least that is how I was swallowed)


#9

Interesting stuff. I’ve much to learn!


#10

Very interesting analysis here. One limiting factor I can see for Amazon is whether they can maintain emerging markets growth vs homegrown competitors.

Also read this interesting piece on leasing servers for AWS and whether that was artificially pumping up apparent famed Amazon cash flow. Might be out of date though.

That said, they’re clearly a very cool company and a great investment for its backers so far.

Without encouraging any particular investment(lol), I do concur with @Vlad on quality of Disney. They arguably have the best IP in the world.


#11

AWS is huge but worth bearing in mind Google / MicroSoft are getting more aggressive in competing with AWS. Google Cloud have SNAP for like $400m per/year. If Google Cloud gets its act together with tech support then they might really dent AWS.


(Christopher) #12

A slightly different angle from the WSJ on Amazon and it’s peers. Paywalled i’m afraid…

https://www.wsj.com/articles/behemoths-have-dominated-the-market-before-but-tech-is-different-1528997537


#13


:chart_with_upwards_trend:


(Alex Sherwood) #14

It looks like Amazon’s about to casually remove a significant chunk of UPS’s revenue :eyes: & save themselves some money in the process. I’m slightly envious of US customers now, I’m sure their parcel tracking / delivery experience is about to get much better.


(Chris) #15

That’s a hell of a statement from Amazon.


(Emma) #16

Interesting read from the BBC on Apple vs Amazon


(Alex Sherwood) #17

Really interesting!

“Both companies are facing issues around regulations. There are issues about taxation, but if it comes down to a straight fight between Amazon and Apple, then given that Amazon has these various strong strings to its bow, then ultimately my belief is that Amazon will win out,” says Mr Saunders.

I suppose the flipside to this is, what if Apple creates or least dominates (in terms of share of revenue) another ‘universal product for humanity’? That might be their cars or glasses (with AR built in).

If they managed to reinvent cars to the same extent as phones, then obviously that could be huge for them. But just as it was with phones, it’s hard to know the full potential until we see what they can come up with.

Personally I think that Amazon is more likely to continue their revenue growth because they can make money in so many different ways. But it’s still possible that Apple will come up with something game changing again.


(Emma) #18

Haven’t seen any signs of that from Apple. Ok, there are rumours but we’ll see how that goes and the prices. Niche products for people with bottomless wallets. Seem to be happy making variations on existing products and that’s worked fine, up to now.
The quote you picked out pretty much sums up my views, Amazon is constantly moving while Apple relies on the fact they’re Apple


(Vladislav Kozub) #19

Exactly that, which summarises the quote I picked up on:

As for Amazon, because it is a younger company than Apple, it still doesn’t have an established presence in many countries, so it has more room to grow than Apple, which already has a global customer base.

“Amazon is much more of a mass market player than Apple - with some instances you could use Amazon every day,” he said.

“With Apple you would only buy one product a year. Amazon has a much bigger potential to scale up than Apple.”


#20

Amazon 101.1: